Skeptical state senators press Medicaid MCO chiefs

Mayo Clinic hasn't signed with any of 3 organizations

Senator Bill Dotzler (D-Waterloo) talks during a Economic Growth Committee meeting at the Capitol Building in Des Moines on Thursday, February 20, 2014. (Stephen Mally/The Gazette-KCRG TV9)
Senator Bill Dotzler (D-Waterloo) talks during a Economic Growth Committee meeting at the Capitol Building in Des Moines on Thursday, February 20, 2014. (Stephen Mally/The Gazette-KCRG TV9)

The three managed-care organizations contracting with the state of Iowa to provide care to the state’s 560,000 Medicaid recipients starting April 1 said during a Wednesday Senate committee meeting in Des Moines they’re “here for long haul” and “committed to providing quality care.”

But most of the senators on the Human Resources committee were skeptical.

“I’ve heard you talking about quality of care, but that’s not what we’ve heard as senators,” said Sen. Bill Dotzler, D-Waterloo, referring to a letter from a concerned Medicaid recipient with a developmentally disabled adult son. “We’re hearing something exactly opposite.”

The senators hammered the three chiefs of the managed-care organizations: Kim Foltz, health plan chief executive officer of UnitedHealthcare; Cheryl Harding, market president of AmeriHealth Caritas Iowa; and Cynthia MacDonald, plan president of Amerigroup Iowa.

The senators asked about established provider networks and the number of Iowans enrolled with each plan — and Sen. Liz Mathis, D-Cedar Rapids, was quick to point out when the numbers cited did not add up to 560,000.

• Amerigroup said in the meeting that 173,000 enrollees have selected its plan.

• AmeriHealth said 188,000 chose its plan

• UnitedHealthcare said 181,000 picked its plan

Iowa Medicaid Director Mikki Stier said there’s a fair amount of “churn” at the start of each year, which could contribute to those discrepancies.

Sen. Amanda Ragan, D-Mason City, asked about the out-of-state provider network, telling the MCO heads many of her constituents go to Minnesota for care.

AmeriHealth’s Harding told senators that the Mayo Clinic, a Rochester, Minn.-based medical research organization, has not signed a contract with the insurer — which the other two then echoed.


“There was no answer as to why, and (Mayo is) serving people now,” Ragan said after the committee meeting. “They did not terminate their contract with us (the state of Iowa), they are just not interested in the relationship with the three MCOs — is really what it’s saying to me.”

Also after the meeting, Mathis questioned where the proposed savings will come from once the state makes the move April 1. Gov. Terry Branstad has said the switch could save millions in the first six months.

“The costs are going to go up from the beginning. I can’t imagine that this is going to save anything,” she said, pointing to a Wall Street Journal article Saturday that discussed why Connecticut ended managed care and returned to a fee-for-service system.

“I asked during our second Oversight Committee meeting, ‘Did you ever think about remodeling the current Iowa Medicaid system?’ And they just stared back at me as if that was something new,” she said.

Branstad said while he hasn’t looked specifically at what went on in Connecticut, he has no plans to follow in its footsteps, saying that state is in big financial trouble.

“Most states have found that managed care has worked effectively (and) has been an improvement,” he said. “We have made much better decisions than they have in Connecticut, generally. I am not familiar with the details of what they did there, but I do know that 30-some states have gone to managed care, and it has been successful in helping to improve the health of patients and reduce health care costs.”

According to the Wall Street Journal article, Connecticut cut ties with three managed-care organizations in 2012 after a state audit found it was overpaying the plans by about $50 million a year. Officials told the newspaper that reverting back to fee-for-service has cut administrative costs from 12 percent to 5 percent.

Gazette reporter James Lynch contributed to this story.



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